Is it possible that a book that claims to trace the evolution of American capitalism to the present as part of the effort to understand philanthropy skirts the system's near-death moments five years ago? Zoltan J Acs, distinguished professor at George Mason University, does just that in his labour of love (but little else) on philanthropy. He examines capitalism as it has worked - he would probably prefer flourished - in the United States until now. But you will not find any entries under subprime, Lehman Brothers, meltdown, recession or any such unsavoury details in the index to the book.
That is not the only remarkable thing about this book. His heroes are those rugged individuals who built America: Benjamin Franklin, the innovator; Thomas Edison, the inventor; Andrew Carnegie, the steel maker; Josiah Stanford, the railroad magnate, among others. He talks of them in a reverential manner that would do Ayn Rand proud. Yet she would throw the book away with disdain because it focuses on altruism as the quintessential American virtue. (For those who came in late, Rand is the high priestess of extreme right-wing economic thinking that treats empathy and altruism as the two worst deadly sins. Her polemical novels, The Fountainhead and Atlas Shrugged, are required reading for all those who think Barack Obama is a dangerous socialist.)
Professor Acs has specialised in entrepreneurship, and this book tells you so in many words and at frequent intervals. He contends that "philanthropy is woven into the cultural fabric of America and into the entrepreneurial middle-class values that founded the country and sustained its prosperity". He says that many of those who created wealth saw philanthropy not as charity but as an investment in the future, in knowledge, and in continuing innovation and invention.
That argument has merit. Anyone who has been to American university campuses cannot help but be impressed by the telltale evidence of support they have received from wealth-creating individuals and families. Some leading private universities - Johns Hopkins, Carnegie Mellon, Stanford, Rockefeller, Cornell - proudly bear the names of their benefactors-in-chief. Many more showcase structures, laboratories, libraries and research centres made possible by the munificence of other donors. That has helped these institutions stay away from church establishments (the source of many European institutions) and adopt a worldly-wise outlook to bettering human existence.
Where I have problems with the Acs narrative is his elaboration of America's evolution. Normally, I am an admirer of the can-do spirit, invention and work ethic that built the US into the mightiest economy ever known, but I also know that there is a seamy side to it. Professor Acs' account is completely sanitised and airbrushed. Thus, we have railroad moguls but not robber barons; metal work and oil pioneers but not manipulating monopolists; hard-working immigrants but no assimilation problems; the struggle between pre-industrial South and enterprising North but no racial tensions; inventors who improved life but not those who stole others' work or stopped them, and so on. One of Professor Acs' current heroes (as also of countless millions across the world), Warren Buffett, has a more nuanced version of how America functions: "I've worked in an economy that rewards someone who saves lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions."
For Professor Acs, the certainty is that entrepreneurial capitalism guided by philanthropy is the future and there is no other place for it than America. Europe is too trusting of state and too involved with religion, and Asians are probably still coming to terms with charity. The saving grace is that unique combination of protestant ethic, creative destruction and radical innovation that obtains in America.
This might sound a bit harsh, but such is the self-absorption of Professor Acs' book that there is little discussion of even the most magnificent achievements of American philanthropy outside universities in that country. For example, the largest philanthropic effort, the work of Bill & Melinda Gates Foundation, is in providing basic healthcare, protecting millions from malaria and tuberculosis in Africa and Asia. The Rockefeller and Ford Foundations jointly ushered in the Green Revolution. These projects saved hundreds of millions of lives, but did not quite act as feedback loops to the process of entrepreneurial economic growth in the US. They are of little interest to our author.
Nevertheless, Professor Acs has a lesson for us, although an unintended one. An argument one hears frequently these days is how India - read government, institutions - hinders wealth creators. The not-so-hidden agenda is that such roadblocks must be removed forthwith. But what Professor Acs shows very effectively is that mere obsession with wealth creation does not sustain it. Ploughing back some of that wealth into social capital, which is what philanthropy does, is an essential condition for the process to continue working. And philanthropy is different from charity. Professor Acs uses my favourite story to distinguish between them: giving a man a fish to eat one day is charity, but teaching him to fish to ward off his hunger for life is philanthropy. We have not started even to be charitable for the most part.
WHY PHILANTHROPY MATTERS
How the Wealthy Give, and What it Means for our Economic Well-Being
Zoltan J Acs
Princeton University Press; xv + 250 pages
